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CBOT corn outlook: Seen down on outlook for harvest progress

U.S. corn futures are expected to start lower Wednesday on projections farmers will increase supplies in the coming days by accelerating the harvest of the crop.

Traders predict corn for December delivery, the most actively traded contract, will open down 5 cents to 7 cents a bushel at the Chicago Board of Trade. In overnight electronic trading, the contract fell 7 cents, or 1.1%, to $6.45 1/4 a bushel.

Driving prices lower are expectations farmers will make good progress on the harvest due to improving weather. Cool and wet conditions in the eastern Midwest will give way to drier weather in a few days, while the western Midwest is already seeing a more favorable weather pattern, said meteorologists for Telvent DTN, a private weather firm.

Traders expect the warmer, drier conditions will speed up the harvest after a slow start. Harvest was 15% complete as of Sunday, one percentage point behind the five-year average for that time of year, according to the U.S. Department of Agriculture.

"We are heading right into the heart of harvest and the weather forecast for the next couple of weeks is nearly ideal," said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage in Iowa.

Traders are paying close attention to the harvest because it will bring in fresh supplies at a time when inventories are estimated at historically low levels. They are eager to see the results of the harvest amid uncertainty about the impact of hot, dry weather on the crop this summer.

Corn futures have already pulled back almost 20% since reaching a record high in June on concerns about demand outstripping supplies.

The U.S. Department of Agriculture, in a quarterly report Friday, will issue its estimate for how much corn was in storage at the start of September. Traders are reluctant to be aggressive buyers amid concerns the government could report supplies were larger than expected, Pfitzenmaier said. That possibility is a seen as a risk after USDA's quarterly stocks estimate in June topped traders' expectations, sending prices sliding.

"Traders are going to wait out that report and then see how things look," Pfitzenmaier said.

Still, demand for U.S. corn has increased since prices fell nearly 8% last week on broad-based selling linked to economic jitters. The USDA confirmed Wednesday private exporters struck deals to sell 124,000 metric tons of U.S. corn to South Korea. South Korean animal feed millers have purchased at least 12 cargoes of corn, totaling 661,000 metric tons, from the global market in the last nine days, trading executives said.